About the Author
Chris has been in the mortgage business for over 12 years. During that time he has received multiple awards and is a respected industry speaker. Most recently, in 2011 and 2012, he was recognized by Mortgage Executive Magazine as being in the top 1% of loan originators nationwide. Chris has also consistently been a President's Club award-winner at his company.
When you're looking to obtain credit for whatever the reason, it's common to have to issue your social security number (SSN) to the lender in order for them to do a thorough background check to make sure that you qualify. But a social security number isn't the only option that consumers have in these instances - they can also obtain what is called a "Credit Privacy Number," or CPN, for the purpose of applying for a loan.
What's a CPN. It's similar to a social security number in that it's a nine digit identifier and each consumer is only permitted one. But it differs from a SSN in that it can better help keep your finances safe and more hidden from the public. Essentially, it offers a little bit more security than a SSN. For that reason, many celebrities, athletes and politicians use CPN s for privacy and security purposes.
What a CPN Does?
While a CPN can be used in substitute of a SSN in some cases, it's not a complete substitute. The basic purpose of a CPN is so that financial transactions can be tracked and lenders and credit reporting agencies can keep an eye on your borrowing history, but without the risk involved of using your SSN. In some cases, you may even be issued a CPN in the event of credit repair .
As mentioned, a CPN isn't a complete substitute for your SSN. For instance, if you're registering a vehicle for a government loan, buying a gun or submitting documents to the IRS, you'll have to use your social security number.
How do you attain a CPN. They're free to get, and can be attained through a variety of different venues. However, there are various scams that claim to offer risk-free, high potential CPNs, ones that would qualify you for lines of credit. A CPN should only be used for privacy and security, not as a loophole
to get a new credit identity. Consult with an attorney, as well as the Social Security Administration in order to make sure you're attaining one from a legit venue. Also your attorney can file a request with the federal government's social security office. Be prepared for the paperwork and know that you will have to provide a reason why you want to file for a CPN.
CPN s and Fraud
While CPN s are valuable to many consumers, they're also often largely linked with fraud. For instance, some credit repair agencies may issue you a CPN for the purpose of repairing your finances. Yet, what many of this crooked agencies are doing is issuing you someone's social security number. You're then applying for credit under someone else's personal information and committing fraud. What's more is that many of these agencies are also selling CPN s, sometimes for thousands of dollars. Never pay money for a CPN - remember, they're free to get.
Here's a look at some other tips for avoiding CPN fraud:
- New Credit Identity: A red flag should be immediately raised if someone is promising you a "new credit identity." There's no such thing as a clean slate when it comes to credit.
- Too Much Information: Is a company asking for your social security number, your bank account information or other personal information? Don't disclose any of this sensitive information before you know they're a legit operation. Something as simple as a quick Internet search is usually enough to verify this.
- EIN s: EIN stands for "Employer's Identification Number." If a company asks you to apply for one to use in lieu of your SSN, walk away. EIN s are legal, but not a substitute for an SSN.
- Don't Pay Upfront: Never pay upfront for credit repair services. According to language under the Credit Repair Organization Act, credit repair agencies aren't permitted by law to seek payment before they've performed credit repair services. However, this law won't stop an unethical company from doing so.
When it comes to CPN s, it's important for individuals to know how it can help them, as well as what it can and cannot be used for. And if a CPN is deemed to be necessary, acquiring it the proper way is extremely important.